The application, made in the ACT Magistrates Court on Friday, was the first sign defence lawyers could use recent capacity issues at the Alexander Maconochie Centre to attempt to have inmates released.

Correctional authorities have taken urgent steps to deal with surging numbers at the prison, which have jumped by a staggering 40 per cent since January.

The AMC held a record number of inmates on Sunday, when 340 prisoners were crammed into a facility that, until recently, had a total capacity of 332 beds.

The facility has since been expanded to 366 beds to deal with the crisis, with prison officers installing more bunk beds into cells and cottages, and using barriers in accommodation areas to try to keep apart different categories of inmate.

It has raised concerns for the human rights compliance of the jail, including from former chief minister Jon Stanhope, who fears it could jeopardise criminals being successfully rehabilitated.

On Friday, Scott Anthony Staker, 30, appeared in the ACT Magistrates Court for a series of serious traffic offences committed in September. Staker is accused of fleeing from police at high speeds, reaching up to 120km/h, while his partner and two young children were in the car. Police have also charged him with drink driving and failing to stay for a drug screening test.

The defendant made a bail application before magistrate Beth Campbell, which was opposed by prosecutors, who feared he would reoffend and fail to appear back in court.

But Staker's lawyer, Kate Bills, from the Aboriginal Legal Service, said her client had strong ties to the ACT and was committed to rehabilitation. She argued strict bail conditions could manage the prosecution's concerns.

Ms Bills then pointed to the overcrowding at the jail, which she said was having an adverse impact on her client. The court heard Staker had been held in segregation for the past 12 days because of the overcrowding, and was being kept in his cell in lockdown for 23 hours a day.

In a statement provided after the bail application, the Justice and Community Safety Directorate said those claims were not correct, and that there were beds available inside the AMC's remand unit.

Ms Campbell refused to release Staker on bail, saying it would be setting him up for ''an almighty failure'', which was likely to see him reoffend and be locked up again.

She said the manner in which he drove, with his children in the car, terrified her and demonstrated the seriousness of his drug problem.

The matter will be back before the court in November for sentencing.

Corrections Minister Shane Rattenbury is holding urgent talks with key stakeholders on the overcrowding issue, as authorities try to come up with a solution to the jail's capacity problems.

A longer-term expansion of the AMC is still in its early design stages.